You might be familiar with the terms “cosigner” and “guarantor” if you are a Charleston renter. But what do they really mean? And what makes the two different from one another? We will outline the distinctions between cosigners and guarantors in this blog post and offer advice on how to approach friends and family for assistance.
What is a Cosigner?
A cosigner is somebody who signs a lease with you and commits to paying the rent if you cannot. A cosigner is treated as an additional tenant, even if only in writing. A cosigner must sign the lease with the tenant and may legally occupy the rental property as well. A tenant’s financial obligations, such as any potential fines, unpaid rent, or property damage, can also be shared by this person. As they must demonstrate an income greater than six times the rent in order to qualify, cosigners typically have better credit than the renter and a higher income. Young or first-time renters may find it much easier to qualify for a rental home with a co-signer.
What is a Guarantor?
A guarantor, compared to a cosigner, makes the promise that they will cover your rent obligations only if you are unable to. A guarantor is not a tenant and does not possess the same rights as a co-signer. In the event that the tenant is unable to pay their debts, the guarantor will act as a financial safety net. Similar to a co-signer, a guarantor should reveal an income that is at least six times the amount of the monthly rent.
Key Differences
An important distinction between a cosigner and a guarantor is that a cosigner is legally liable for the rental property, whereas a guarantor is only financially responsible. If the tenant fails to pay rent or make necessary repairs to the property, the guarantor is held liable. In contrast, a cosigner is liable for the rent whether or not the tenant does.
Why You Might Need a Cosigner or Guarantor
There are several instances in which you may need a cosigner or guarantor. It’s possible that you’re new to renting and don’t yet have any established credit. Or perhaps you’ve encountered financial difficulties, which have caused your credit score to decline. Regardless of the cause, you might need to enlist the assistance of a friend or relative if you can’t get an apartment on your own.
How to Ask Someone to Help
It’s crucial to be upfront about your financial situation when requesting a cosigner or guarantor. Describe your need for assistance and what would happen to them if you were unable to make rent. A copy of your lease agreement or proof of your income should be provided, as well as any other pertinent paperwork. Last but not least, be sure they are aware that if you are unable to pay your rent, they may be held accountable. Therefore, it is preferable to choose someone you can trust and who is financially secure.
A big choice is making someone your cosigner or guarantor. However, the right person will be happy to assist you if you are honest about your financial situation and outline the risks involved. You can contact one of our Charleston property managers if you have any further inquiries.
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We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.